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Tensions Rising as Shutdown Looms

Joshua Roberts

By Michael Rainey

January 12, 2018

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It’s understandable if you’re experiencing a bit of shutdown fatigue, given the many dire warnings about impending closures of the federal government coming out of Washington over the last few months. But with Congress repeatedly pushing the legislative envelope, passing one short-term deal after another, the warnings have been warranted, even if a closure has failed to materialize thus far.

As Bloomberg’s Sahil Kapur described the current state of affairs Friday, “Congress keeps funding the government in increments of a few weeks or months. In 2017 there were four (4) CRs. There may be yet another one next week.”

Just a few days ago, it looked like Congress and the White House were headed toward an agreement on immigration issues, smoothing the way for a budget deal. But President Trump rejected a tentative deal reached by a bipartisan group of senators Thursday, and reports that he used crude and offensive language in reference to immigrants further inflamed tensions on Capitol Hill Friday, raising the odds of a potentially crippling budgetary showdown.

Referring to Trump’s incendiary comments, Sen. Dick Durbin said Friday, “My thought that we might get a bipartisan agreement approved by the White House died yesterday.” Some Democrats are hardening their position on immigration issues, with liberal activists pushing for a legislative solution on the Deferred Action for Childhood Arrivals program to be included as part of any budget deal.

At the same time, some Republicans are threatening to withdraw their support for a short-term spending deal next week unless they receive assurances that spending caps on defense spending will be raised significantly.

In a note to clients Friday, Cowen Research’s Chris Krueger said he still thinks a short-term agreement is likely next week, avoiding a shutdown for now, though he notes that the situation is fluid and could change rapidly. However, Krueger added, the prospects for a long-term budget agreement aren’t looking good: “Shutdown sometime this year over DACA/TPS/Wall remains likely.”